Thursday, January 20News That Matters
Shadow

Tag: view

View: How the government can truly make India’s state-run banks efficient just like their private sector peers

View: How the government can truly make India’s state-run banks efficient just like their private sector peers

Finance
Budget 2021 has finally made long-awaited policy pronouncements of a reformist nature in the banking and financial sector. Governments are prone to make announcements that catch headlines, but soon fade away with only half-hearted implementation. One says this with the hindsight of the declaration of divestment of the Industrial Development Bank of India (IDBI) in 2015 and later of Air India. But genuine enthusiasm arises from the fact that after declaring that GoI would privatise public sector banks (PSBs), set up an asset reconstruction company (ARC) and establish a development finance institution (DFI) among others, the administration has started to take steps to implement these. It is encouraging that the finance ministry has already sought timelines from ministries on getting the deci...
Oxford: The soggy view from UK’s oldest rain record

Oxford: The soggy view from UK’s oldest rain record

Science
The .css-yidnqd-InlineLink:link{color:#3F3F42;}.css-yidnqd-InlineLink:visited{color:#696969;}.css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visited{font-weight:bolder;border-bottom:1px solid #BABABA;-webkit-text-decoration:none;text-decoration:none;}.css-yidnqd-InlineLink:link:hover,.css-yidnqd-InlineLink:visited:hover,.css-yidnqd-InlineLink:link:focus,.css-yidnqd-InlineLink:visited:focus{border-bottom-color:currentcolor;border-bottom-width:2px;color:#B80000;}@supports (text-underline-offset:0.25em){.css-yidnqd-InlineLink:link,.css-yidnqd-InlineLink:visited{border-bottom:none;-webkit-text-decoration:underline #BABABA;text-decoration:underline #BABABA;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-skip-ink:none;text-decoration-skip-ink:none;t...
View: Hijacking bankers to catch swindlers is a terrible, terrible idea

View: Hijacking bankers to catch swindlers is a terrible, terrible idea

Finance
By Andy Mukherjee Corporate chicanery appears in multiple forms and with unfailing regularity: think Enron Corp. or Wirecard AG. What bedevils capitalism in India is the propensity of some investors to cheat all other stakeholders. In good times, “promoters” — as controlling shareholders are known in local law — puff up project costs and award contracts to related parties, draining profits away from the company. The extraordinary effort that entrepreneurs put in to beat the country’s legendary red tape provides, at least in some minds, a justification for helping themselves to an outsize share of the spoils. A highly opaque system of election financing gives politicians a stake in perpetuating the status quo. In bad times, promoters leave creditors with hardly any value to extract from fa...
View: Why a new ‘Bad Bank’ when there are 24!

View: Why a new ‘Bad Bank’ when there are 24!

Finance
After years of lull bankers are turning proactive. This time it is not a new found aggression to lend but to palm off their bad loans to taxpayers. A `Bad Bank' is being touted as the panacea for industry’s ills, yet again. This time in anticipation of defaults post the lifting of moratorium granted to overcome the Covid-19 stress instead of post the bad loans pile up. Once banks’ bad loans are transferred to the newly created entity banks would turn agile once again and fuel economic growth with new credit. Many countries have followed such models including Sweden, Indonesia and Ireland. In its simplest form it is selling the Non-Performing Loans of a bank to the bad bank so that bank’s financials are sound and attractive. India too discussed it soon after the Asset Quality Review in 201...
View: Two years of PNB scam, risks far from mitigated

View: Two years of PNB scam, risks far from mitigated

Finance
By Atul KhadilkarIn February 2018, after one of the largest frauds in Indian banking was reported by a public sector bank, one of the systemic deficiency identified was the core lack of integration between banking platforms of banks and the SWIFT messaging system. This unanticipated operational risk caused a very large financial loss to the concerned bank but also had an impact on its reputation due to perceived governance lapses. The Reserve Bank of India swiftly came out with guidelines to plug the identified gap and mandated banks to implement these on utmost priority. Banks took the necessary steps and met the regulatory directive of integrating the two systems mentioned earlier in this note. Another key mandate from the regulator was to improve governance of relatively higher value tr...